New OFT investigation in credit card charges

The Office of Fair Trading has launched a new investigation into MasterCard as it "has reasonable grounds for suspecting" that the way transaction fees are set may break competition rules.

MasterCard levies interchange fees on retailers to cover the cost of transferring funds when its cards are used.

Last September the OFT ruled that the charges levied since March 2000 were at least £100m too high, broke competition rules and amounted to a tax on consumers. MasterCard is appealing the decision.

In November MasterCard introduced new arrangements for setting the interchange fees. The OFT’s latest investigation is into these new arrangements but the outcome of MasterCard’s appeal "is likely to have a substantial, and potentially decisive, impact on the new investigation which has now been launched", according to the OFT statement.